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Jetstar Hong Kong’s application does not meet Basic Law requirement and approval would adversely affect Hong Kong’s economy and position as an aviation hub

05 Sep 2013

(HONG KONG) Dragonair has filed a formal objection to the application by Jetstar Hong Kong for a licence to operate in Hong Kong. Our objection is based on the following principal grounds:

Jetstar Hong Kong does not satisfy the requirement under Article 134 of the Basic Law that it must have its principal place of business in Hong Kong. It is clear that management control of Jetstar Hong Kong would rest in Australia with Jetstar Australia and Qantas Airways. This means that Jetstar Hong Kong’s principal place of business would be in Australia, not Hong Kong.

Given the capacity constraints at Hong Kong International Airport (HKIA), the allocation of scarce slots for aircraft traffic should take into account what is best for the overall benefit of Hong Kong and its economy. We do not believe that Jetstar’s business model will make the best use of the remaining available slots at HKIA. This is particularly important since the third runway at the airport, if approved, is not expected to be in operation before 2023.

We are not against competition. We compete successfully in Hong Kong and elsewhere in the region each and every day, but we do not believe this is a matter of competition. This application raises important legal and public interest issues which could have very clear negative implications for the Hong Kong economy. Granting a licence to a foreign-controlled airline would set a very negative precedent that would undermine the health of aviation in Hong Kong. Approval of this application, therefore, would not be in the best interests of the Hong Kong economy and it would be contrary to the Basic Law.